FIRMS MULLING AFRICA VENTURES ADVISED TO THINK LONG-TERM

FIRMS MULLING AFRICA VENTURES ADVISED TO THINK LONG-TERM

Caterpillar Inc.'s sales of $750 million worth of agricultural, earth-moving and mining machinery to African nations last year were the fruit of a decades- long investment of time and money.

The Peoria, Ill., company shunned the short-term financial benefits, choosing instead to create the long-term relationships vital to successful business ventures in Africa, said Jerry C. Schmeil, Caterpillar's international marketing manager."It's important to do your homework . . . You have to choose the right partner and have a long-term commitment. Don't expect a short-term windfall," Mr. Schmeil said.

For London-based Rank Xerox Ltd., a joint venture of the U.K. branch of the Xerox Group and the Rank organization that markets and manufactures Xerox products in Africa, the Middle East, Europe and India, choosing an African business partner with local influence and expertise is one of the keys to doing business in Africa successfully.

"Africa doesn't suffer fools lightly," said James C. White, Rank Xerox's director of Africa operations.

The two executives were among speakers at a one-day conference on "Doing Business in Africa in the 1990s" sponsored last Tuesday by The Capstone Group, a financial services company based in New York.

While Africa's business environment is riddled with frustrations, there is still money to be made by investing in the resource-rich continent, speakers at the conference said.

"Africa has never looked so promising," said Jerry L. Drew, an executive director and vice president at the Washington, D.C. office of The African- American Institute. "I feel there's been too much negative. The thinking has been reactive, not proactive."

Added Robert E. Robinson, president of Unlimited Contacts International, a management and consulting firm with offices in New York and Africa: "The U.S. has the technology and capital and know-how. You have to do your homework. But you can make money."

Conference speakers repeatedly stressed the importance of "doing your homework," a long-term business commitment, the use of local expertise and talent and finding creative financing in business relations with African nations.

Mr. Schmeil, for example, noted that Caterpillar has a continent-wide network of local dealers to service its equipment.

"We have a sophisticated support system to supply the parts and necessary repairs to our machines," he said. "Anyone can make the first sale. The key is a support system."

Rank Xerox uses subsidiaries and distributorships to sell its products in Africa.

Moreover, "you have to have patience. Communications are not at the same level of the United States. And much business is done face-to-face," advised Margaret E.O. Edozien, an attorney with Stewart & Stewart, Washington, D.C.

Ms. Edozien, who was born in Nigeria, said U.S. companies must be prepared to contend with lengthy government approval processes, limits on equity ownership, and the absence of strict intellectual property protection laws in Africa.